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Swiss Life Surges on Profit in Home Market, France: Zurich Mover

Feb. 27 (Bloomberg) -- Swiss Life Holding AG climbed the most in 18 months after Switzerland’s biggest life insurer posted higher operating profit in its home market and France.

Swiss life rose as much as 8 percent, the biggest intraday gain since Aug. 12, 2011, and was up 7.5 percent at 150.20 francs as of 3:10 p.m. in Zurich trading. The stock has climbed 24 percent this year, making it the best performer on the 28-company Bloomberg Europe 500 Insurance Index.

Swiss Life kept its dividend unchanged at 4.50 francs ($4.84) a share after reporting in November it will cut costs by as much as 160 million francs and eliminate as many as 400 jobs. Full-year operating profit climbed by almost a third at its Swiss unit, the company’s biggest business, while earnings by that measure also increased in France and Germany.

“All major units in Switzerland, France and Germany are showing better-than-expected segment results,” said Stefan Schuermann, a Zurich-based analyst with Vontobel Holding AG.

Operating profit in Switzerland rose to 634 million francs and climbed by 27 percent to 157 million francs in France. The company’s German unit posted a 19 percent increase in operating profit to 69 million francs.

Swiss Life posted a second-half net loss of 268 million francs compared with a profit of 202 million francs a year earlier, according to Bloomberg calculations that were confirmed by the Zurich-based company. The average estimate of five analysts surveyed by Bloomberg was for a 300 million-franc loss.

AWD Writedown

The loss came after a 578 million-franc writedown at its German brokerage AWD Holding AG, which posted an operating loss of 591 million francs last year. The potential for a further writedown at AWD is low, Swiss Life Chief Executive Officer Bruno Pfister told reporters on a conference call.

“Even though net profit contracted markedly due to the impairment in AWD’s intangible assets, our key figures for the past year show that we have a solid foundation on which to further expand our market position in the coming years,” Pfister said in a statement.

The company cut its targeted return on equity in November to between 8 percent and 10 percent over the next three years from between 10 percent and 12 percent.

To contact the reporter on this story: Carolyn Bandel in Zurich at cbandel@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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